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Cadbury Schweppes– Understanding Organization ‐ Assignment

Teesside University of UK Hong Kong Institute of Technology MAR1036-N Understanding Organizations Assessment Report

LAU HIU FUNG Donald Lau

11830049 V8188813 MAR1036-N

Understanding Organizations

1


Assessment Report TABLE OF CONTENTS

INTRODUCTION ..................................................................................................................... 3

CHAPTER

1. ORGANIZATION ANALYSIS ....................................................................................... 4

Condensed Environment .............................................................................................. 4

Political ......................................................................................................................... 5

Economic ...................................................................................................................... 6

Social ............................................................................................................................ 7

Technological ................................................................................................................ 7

Legal ............................................................................................................................. 8

Ecological ..................................................................................................................... 9

2. CULTURAL DIFFERENCES IN MANAGEMENT ....................................................... 10

Implications of cultural change on Cadbury and Kraft ................................................ 11

2

Comparison of Kraft’s and Cadbury’s culture ............................................................. 12

Benefit of management in new organization .............................................................. 12

3. THE FACTORS HOW TO IMPLEMENT AND CULTURAL CHANGE ....................... 13

Strategy Plan and Implementation of change ....................................................... 13-14

CONCLUSION AND RECOMMEDATIONS .......................................................................... 20

EFERENCE ........................................................................................................................ 21

Organizational structure ........................................................................................ 15-18

Strategic as practice ................................................................................................... 19

R

APPENDIX ............................................................................................................................ 22


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troduction: Early history of Cadbury’s Quaker origins to Cadbury’s KraftHeinz since

650. The company of Cadbury was founded by pacifist George Fox in 1650. bury, formerly Cadbury's and Cadbury Schweppes, is a

Briti

lez

ily

Oxford and Cam

in the

Richard and George they were developed in the busi

her

xcellent for selli

nd of th

nse of civic duty. Cadbury’s aimed to build ided

In

1In the past of Cad

sh multinational chocolate company. Since 2010, The Company of Kraft Foods Group, Inc. had purchased to Cadbury’s KraftHeinz. According to the original company of Kraft Foods Group which in turn was renamed MondeInternational. It is the second-largest chocolate brand in the world after Mars. Cadbury is Multinational Corporation in Uxbridge, West London, and operates in more than 50 countries worldwide. In the famous of product, its Dairy Milk chocolate, the Cream Egg and Roses selection box, and many otherChocolate products. One of the famous of British brands, in 2013 The DaNews named Cadbury among Britain's most successful exports.

In the previous name of Quaker, this pioneers believed ‘your soul lived or perished according to its use of the gift of life. They inspired the ‘men of America’ such as Hershey and Mars. Quakers were banned from

bridge. Quakers were not allowed to join the armed services or to stand as members of Parliament. They turned to the world of business but withSociety of Friends strict guidelines. Quakers viewed themselves as principled capitalists in the society.

Cadbury was developed in Birmingham of British in 1824, in this period of sold tea, coffee and drinking chocolate that is developed by John. His brother of Benjamin and his sons

ness. One of his son, George developed the garden and village designed to provide the company's workers improved living conditions.

Since 1905, they are designed the Daily Milk Chocolate and used a higproportion of milk within the cuisine compared with competitor of products.

Approached to1914, the chocolate was the corporation of eng in the product. Cadbury, combine with Rowntree's and Fry, were the

Great three British chocolate manufacturers which were from beginning to ee nineteenth and twentieth century. The Cadbury family built 300 houses for its workforce away from the

Birmingham ‘slums’. They are Philanthropists which have the sense of civic duty. Philanthropists were guided by a se

a pleasant peaceful estate with a sense of belonging. They were provthe schools & leisure facilities. Also, they provide the class in the evening formen and women. Cadbury’s family which employed doctors and dentists to look after their families. They provided the external activity for country and


summer camp. They are made in the first of pension provision in the UK for employees. Recently, employees are still allowed the time of rest for community work and 80% of the workforces are active.

Ch pter 1 a

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Organization Analysis in Condensed Environment: of organization in Cadbury Schweppes which divide into six pt to describe the business environment and process. The six

A PESTLE analysis is a strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future. The framework examines

anization.

We are analysiscriteria of concecriteria as shown below: There are differences to have political, economic, social, technological, legal, and ecological.

opportunities and threats due to Political, Economic, Social, and Technological, Ecological and Legal forces. Outputs from the analysis inform strategic planning processes and contribute to market research. It provides an overview of all the crucial external influences on the org


Political in the organization analysis: This is according to the political problem in the marketing of Cadbury

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chweppes since 1915. Cadbury's Milk Tray was first produced in 1915 and er of the First World War.

Withe

or use

e

ass

lds to plant crops. As chocolate was regarded as

hen the government banned manufacturers from using fresh milk.

Scontinued in production throughout the remaind

in the period of the First World War, there have more than 2,000 of Cadbury's male employees joined the British Armed Forces, and to support thBritish war effort, Cadbury provided chocolate, books and clothing to the military troops. George Cadbury built up two company-owned buildings fas hospitals – "The Beeches" and "Fircroft", and the management of both hospitals earned the War Office's highest award. Factory girls, dubbed 'ThCadbury Angels', volunteered to do the laundry of injured soldiers recovering in the hospitals. After the war, the Bournville factory was redeveloped and mproduction began in earnest. In 1918, Cadbury opened their first overseas factory in Hobart, Tasmania. The parts of the Bournville factory were turned over to war work, producing milling machines and seats for British fighter aircraft. Workers ploughed football fiean essential food, it was placed under government supervision for the entirewar. During the War, rationing of articles for daily use was enforced and raw materials were in short supply. Cadbury Dairy Milk came off the shelves in 1941 wInstead there was Ration Chocolate, made with dried skimmed milk

Post war product launches

1947 – Milk Tray bar is launched

1948 – Cadbury Fudge is launched

1955 – First TV ad is aired

ed

th Swcheppes

d

1960 – Skippy is launched

1967 – Aztec Bar is launched

1967 – Toffee Buttons is launch

1969 – Cadbury merged wi

1970 – Curly Wurly is launche

1971 – Old Jamaica is launched

1971 – Cadbury’s Crème Egg is launched

https://en.wikipedia.org/wiki/Milk_Trayhttps://en.wikipedia.org/wiki/British_Armed_Forceshttps://en.wikipedia.org/wiki/George_Cadburyhttps://en.wikipedia.org/wiki/Bournvillehttps://en.wikipedia.org/wiki/Hobart


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conomic in the organization analysis: The external environment of economic in which is being the factors of the arketing change in environment. The factors that influence the consumers

onsider and monitor by four

geogt.

keting of tic

invell

cial

is

E mbuying power and marketing strategies. This can ccriteria which can influence the economic. The four criteria consist of inflation, deflation, unemployment and income. There are more important reasons affecting the economic, such as discretionary income and resource availability.

Since 2010, it had greater expansion of business after the purchased of Cadbury by Kraft co. The growth of business in economic is influenced byexternal environment of condensed conditions. When there have no

raphical boundaries in business development, it cans growth and expansion of differences cultural in involving that multinational managemen

There are stages of business cycle which can influence the marCadbury. A business cycle is a cycle of fluctuation in the Gross DomesProduct (GDP) Formula consists of consumption, government spending,

stments, and net export. We break down the GDP formula into steps in this guide. Gross Domestic Product is the monetary value, in local currency, of afinal economic goods and services produced within a country during a speperiod of time (GDP) around its long-term natural growth rate. It explains the expansion and contraction in economic activity Marketing Economic Market economy definition – a pure market economy is an economic system where there are no regulations and players are free to trade as they please that an economy experiences over time. A business cycle is completed when it goesthrough a single boom and a single contraction in sequence. The time periodto complete this sequence is called the length of the business cycle. A boom characterized by a period of rapid economic growth whereas a period of relatively stagnated economic growth is a recession These are measured in terms of growth of the real GDP, which is inflation Fiscal Policy refers to the budgetary policy of the government.


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Social in the organization analysis: After merger of Cadbury and Kraft co., the new management is control by

America. Today, corporate responsibility has expanded to cover the entire societal framework in the America and throughout the world.

There are new orientation of marketing philosophies, policies, procedures, and actions that have the enhancement of society’s welfare as a primary objective.

The social responsibilities while traditionally of sense in concerned anager’s relationships with customers, employees, and stockholders. The

e meaning of extend to relations with

ends and lifestyle pref

opulation of people that affecting in quantities of Cadbury mar

and the technique in which is

ent I

anizations can ride on the data to reveal insights that lead to etter decisions and strategic business moves.

y which automates the t

llows computers

e

msocial value in the business organization is th

government and the general public. These factors were influenced to the new management of Kraft co. with Cadbury. There are factors occurs of the terrorism, demographic tr

erence in which affecting the population growth and decrease. As terrorism of the war this will decrease the people in demographic statistics. These factors of p

keting. Technologies that affect the organization: Recently, there are new technology that affecting the research of marketing in Cadbury. The results of research divide into two methods of Big Data and Machine Learning. The term Big Data refers to the large volume of data (both structured and unstructured) that affecting a business day-to-day. It is used to IT equipm(Ipad) to collect the user data and then user data will be analyzed by Amachine. Orgb Machine Learning is a data analysis methodologbuilding of analytical model. It is a branch of artificial intelligence thamachines should be able to learn and adapt through experience. Using algorithms that iteratively learn from data, machine learning ato find hidden insights without being explicitly programmed where to focus. So that, it used to the two methods for generate the results and then madbetter decisions and strategic business in the Cadbury and Kraft co. Thistechnology can collect to external condition of environment.


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ire

ent. adly prohibits

nticompetitive agreements and unilateral conduct that monopolizes or ttempts to monopolize the relevant market. It identifies a competitive arketing system as national policy goals.

Act who enacted at the restriction tha er

rice

dire

at investigate the business

prats

36

d to protect small reta rice for

ate

w to

ties an operator has to protect children's

y are Clayton Antitrust Act and Clayton Act who’s made the laws. Reg

Legal in the organization analysis: The external environment of Legal in which it is includes of laws and

interpretation of laws. This is component of marketing environment that requcompany to protect the competitor and consumer right. The Laws in organization it affects the marketing and maintains a competitive environm

According to reference in 1890, Sherman Antitrust Act broaam

More reference in 1914, Clayton Antitrustt was a part of United States antitrust law with the goal of adding furth

substance to the U.S. antitrust law regime; the Clayton Act sought to prevent anticompetitive practices in their incipiency. The practices it such as pdiscrimination, exclusive dealing, typing contracts, and interlocking boards of

ctors where effecting monopolize the relevant market. In addition to reference in1914, the Federal Trade Commission Act,

prohibits the unfair methods of competition, establish the Federal TradeCommission Act, an administrative agency th

ctices and enforce the FTC Act. The Act, signed into law by Woodrow Wilson in 1914, outlaws unfair methods of competition and outlaws unfair acor practices that affect commerce. The laws in organization it regulate the competition, the reference in 19the Robinson Patman Act who codified that prohibits anticompetitive practicesby producers, specifically price discrimination. It was designe

il shops against competition from chain stores by fixing a minimum pretail products. It also prohibits selling at unreasonably low price to elimincompetition.

Another external environment as it is affecting the marketing that it hoprotect the consumers. We can reference in 1998 of the Children’s online Privacy Protection Act, it responsibiliprivacy and safety online including restrictions on the marketing of those under 13. It identified the products of chocolates in Cadbury that affecting the growth of children.

Protecting competitive of the aim is used to maintain competitive environment. This can reduce the trend toward monopolies. Founding in reference, the

ulating competitive of marketing environment this can to protect independent merchants against competition from larger chain stores.

https://en.wikipedia.org/wiki/United_States_antitrust_lawhttps://en.wikipedia.org/wiki/United_States_antitrust_lawhttps://en.wikipedia.org/wiki/United_States_antitrust_law


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four miles from Birmingham. The move to the countryside of mod siness

xic to make the hazard

prevention and noise pollution.

d

ham

.9 ha) of nal,

lle and opened the Bournville factory the following year.

00

Ecological in the organizational analysis:

In 1878, Cadbury’s factory decided to build new business premises in countryside

el village was unprecedented in business. The garden style of bupremises in countryside, which made the comfortable and convenience perception with their workers. This is no concerning in environment problem in garden style of business offices and premises. That is protecting the countryside and shoreline. They made the measure to reducing the toemission, pollution, spills. They enacted at regulation

Better transport access for milk that was inward shipped by canal, ancocoa that was brought in by rail from London, Southampton and Liverpool docks was taken into consideration. With the development of the BirmingWest Suburban Railway along the path of the Worcester and Birmingham Canal, they acquired the Bournbrook estate, comprising 14.5 acres (5countryside 5 miles (8.0 km) south of the outskirts of Birmingham. Locatednext to the Stirchley Street railway station, which itself was opposite the cathey renamed the estate Bournvi

In 1893, George Cadbury bought 120 acres (49 ha) of land close to the works and planned, at his own expense, a model village of garden which would 'alleviate the evils of modern more cramped living conditions'. By 19the estate included 314 cottages and houses set on 330 acres (130 ha) of land.As the Cadbury families were Quakers there were no pubs of beer in the estate.

https://en.wikipedia.org/wiki/Canalhttps://en.wikipedia.org/wiki/Birmingham_West_Suburban_Railwayhttps://en.wikipedia.org/wiki/Worcester_and_Birmingham_Canal


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hapter 2

ultural Differences in management: Cultural diversity appears while it is in the organization of products and

laces of location in development with many countries. The business rganization of cultural diversity when it is has great impact in global economy. hen there have no geographical boundaries in business development, it ns growth and expansion of differences cultural in involving that ultinational management. This can meet the objective of requirement in mmon culture. Therefore, the point of view cultural diversity becomes the

anizations going globally international. erger of Cadbury and Kraft co., there are contribution of

ansion of any business

ent of

y, is base on

, or

selling that is involving ns,

ifferences are significant impact. However, Alder said that

h of behaviors in family and

ing

C

C poWcamconeed for the org After the mCultural Diversity towards development and exporganization. We are further to explain the theory of cultural Diversity and discussion on how cultural Diversity will be significant to the developmglobal business. Culture is something of impact that is being carry forwarded from historand it is related to behaviour patterns, beliefs etc. Diversity Culturalethnic, gender, racial, and social economic variety in a situation, institutiongroup; the coexistence of different ethnic, gender, racial, and socioeconomicgroups within one social unit. The variety of products in the totality of socially transmitted behavior patterns, arts, beliefs, institutioand all other products of human work and thought. Adler (2008) explained the stress of cultural diversity on multinationalsand global firms, beginning that now a day it becomes very obvious that national cultural dcomparative impacts depend on the stage of the growth of firm, industry and world economy. Therefore, we understand the importance of cultural diversity at geographical location it is very important to understand the organizational culture first. The cultural of the family and particular community that order how each members of the family or community will behave and act to each other and witoutside of the home or community. The performancecommunity while it impact from the past of history in rituals. The value of cultural organization in minds that through the rituals, practices and keepthe common behaviors. In here indicate that the organization cultural is not differences with normal cultural as well as it impact by common perception from the organization’s members.


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. ence that the workers from different cultures reflect different

There are important and significance of diversity cultural in the workplaceThis can influlearning styles and bring different preferred working styles to their jobs.

Implications of cultural change on Cadbury and Kraft:

Implications on Kraft Implication on Cadbury Strengthened Brand Damaged Heritage Drives higher performance leading to high

Lower moral and performance er revenue

Better control of the organization Staff burn-out Better reputation Risk of losing benefits schemes to

American procedures Efficiencies through alignment of Trust Issues procedures and processes Alignment of goals Weakened Brand

ltural change on Cadbury and it became new .

e de-motivated leading to low morale and performance, and loss

rger and acquisitions tion resulting from change of process and p

o wea graceful attitude, it may

conflicted with each other that leading to pressure and tress, so that it increases the emotion of the staffs.

A depend on

The impact of cuorganization of Kraft Foods Group, Inc

Staff would b

then it reduced of productivity and of revenue. Before the me of both company, the risk of resigna

rocedure. There are lacks of trust leads t

reduce communication. k loyalty and

There are staffs s

ll people of the staffs they feelings of insecurity and uncertaintycareer in the future.

There are problem in relation to the risk of diminishing Cadbury’s brand.


Comparison of Kraft’s and Cadbury’s culture: Type of Culture Characteristic Cadbury Kraft

Networked

Participation

Friendship & Networking

Networking throughout the organization

Helping others

√

√

√

√

Mercenary

Performance and effectiveness

Hard work

Material reward

√

√

√

√

√

√ Destroying competition

Fragmented People w

colleagues

rganization

orking alone

Few links with

Aiming for goals outside o

Communal lity

Family atmosphere

lue in work

Deep friendships

Shared value of sociabi

A passion for business

Sense of va

√

√

√

√

√

√

√

Benefit of management in new organization:

te new organization, competitive advantage is define value for its customers. This can make the great , it can superior to that of it te, it can enable em to the best com

After merg Kraft co., there are ng terms expand the multina tries in the market . When there have o geographical boundaries in business development, it cans growth and xpansion of differences cultural in involving that multinational management.

Culture crea competitive benefit ind as how a business creates er than the costs of supplying them. Moreovers competitors. Ultima th

petition. er of Cadbury and lo to tional of many coun ing

ne

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Chapter 3

The factors how to implement and cultural change:

13

Strategy Plan and Implementation of change: Establish in sense of urgency:

Examine the limitations of the existing culture and its impact on perfor cation to Senior Management the need for the change. Forming a powerful guiding coalition:

Assemble a group from senior management and Union members to champion the change ain momentum. Seek internal and external support, e.g. Government to aid the transition.

reating a vision Senior management to develop a new mission statement which of

ies to execute the

Com

nels such as TV, emails, documentation, bulle

ge. aints and resource issues for the change to be implemented

and ange.

Strong leadership Good support From team

Empathy and respect for acquired company

Government Interventions

Bad press by the made

Employee resistance Unions

Brand loyalty e.g. Consumer nication of change

Good strategy and paln

Cultural

Change

Good commu

boycotting brand Resources e.g. human and finance

Adapted from Kurt Lewin(1943) Force Field

mance. Communi

. Use press coverage to maint

C

incorporates the new culture and develop effective strategvision.

municating the vision: It is necessary to communicated new vision throughout the organization and to consumers using different chan

tins, etc. It provides constant two feedbacks during transition. Empowering others to act on the vision: Create the right environment to empower staff to act on the chanIdentify any constr

removed obstacles. Ensure staffs have the time to commit to the ch


14

a corporate away day for Cadbury and Kraft staff to bond, whilst ge and the benefits. Inter-company positions

change: d

nd he new

Plan for and create short term wins: Plandriving the message of chanchanges to help merge culture. Motivate employees involving in the improvement through rewards. Negotiate new realistic terms and conditions, e.g. wages and pension. Consolidating gains and producing more Use the new synergies derived from the short term wins to spring boarlong term change, i.e. those yet to be confronted, such as tackling Union resistance and consumer loyalty. Institutionalize new approaches: Articulate to the organization the connection between new norms, behaviors and the organization performance. Document the new culture aorganizations polices. Make sure leaders that come on board adopt tculture straight away.


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rganizational structure: We can work in effective and efficiency of organization structure while

makes possible the application of the process of management. It also creates framework of order and command through which the activities can be lanned, organized, directed and controlled. Moreover, it defines task, sponsibilities, work roles, relationships and channels of communication.

O itapre


Structure by division of work

16

t

• By major purpose - grouping according to specialism (dept or skill)

• By product or service – integrated into semi autonomous units with collective responsibility for business process (e.g. A&E)

• Common timescales – different tasks are undertaken at

– allocation of duties according to

to fferent requirements

• Location – geographical boundaries (e.g. LA services) • N ch as local

co entral depts.)

ature of work – a special common feature sunditions needing first hand knowledge (e.g. c

different times (e.g. shift working) • Staff employed

experience, skill or qualification (e.g. doctors or nurses) • Customers or clients to be served – separate groups

deal with di(e.g. trade and retail)

Peter Dr e:

ance. ut poor rformance impossible, no atter how goo ers may be. To improve organisation ructure will therefore always improve performance.”

ucker (1989), explained the theory of organisational structur“Good organisation structure does not itself produce good perform

organisation structure makes good peBm d the individual manags …


17

Impact of Technology on Organisational Structure

• Scale – impact on the number of jobs

provided, a means of compartmentalisation to manage human activity

• Function – produces a need to accommodate

• Integration – influences existing structures, e.g. integration of production, logistics and marketing

new jobs or functions within a structure


18


19

Strategic as practice:

What

Where

When

How

Why

Who

To ensure the organisation serves its basic purpose – efficient production of goods or services

To take charge of

strategy making and adapt the organisation in a controlled way to changes in its environment

To design and maintain the stability of the organisation

To ensure the organisation serves the ends of those people who control it

To serve as the key informational link between the organisation and its environment

As a formal authority to operate the organisations status system


20

onclusion: The primary reasons for mergers and acquisitions are revenue gain.

owever this approach rarely takes account of culture differences which may hibit successful adaption.

The analysis shows that Kraft needs to change the culture of Cadbury to ke better control of the organization and strengthen its brand. However, to chieve this it will require strong leadership, good communication and a well ought out strategic and plan.

One of the most complex and difficult problem to overcome will be staff sistance, but a long term impact of the change could be more profound to

onsumer brand loyalty.

ecommendations:

Early identification and involvement of stakeholders is pivotal It would be advisable to do a culture assessment of the organization prior

to purchase. Cultivate cultural change, do not forcefully exert a new culture, rather

organically over time.

C

Hin

taath

rec R

allow it growConstant communication and feedback is key, this cannot be over emphasized.


21

ternational Dimensions of Organizational Behavior. Ohio,

.youtube.com/watch?v=bA7VtOdxJRA • http://www.mondelezinternational.com/about-us/~/media/MondelezCor

porate/uploads/downloads/mondelez_intl_fact_sheet.pdf • http://www.mondelezinternational.com/investors/corporate-governance

#ourBoard

Reference: Adler, N. (2008). InThomson Higher Education.

• http://www.kraftheinzcompany.com/ • https://www


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Appendix:

teesside university of uk of cadbury chocolate.pdfdairy milk chocolate, the cream egg and roses...

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